If you're new here, this blog will give you the tools to become financially independent in 5 years. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger on losing their jobs to the next wave of downsizing.
Here's more than a hundred online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before delving into the forum journals and looking for the crowd's wisdom for your particular situation.

I just spent money on a “want” for the first time in over six months(*). Obviously I had a bit of a streak going there, so what caused me to break it? A new pair of headphones that’s what. I just bought a pair of Grado SR60 headphones and compared to the free airline headphones I used to use or the built in speakers in my Mac they sound phenomenal.

Actually before I found my way towards financial independence, I used to be a bit of an audiophile. Audiophiles are crazy who spend fortunes on HiFi-equipment for that perfect sound reproduction usually playing CDs called “Soundstage I” going something like “This is a cymbal 5 feet to the right … CLANG … this is the symbol 5 feet further back …. CLANG” all while marveling at how lifelike the reproduction sounds. The silver RCA cables between my CD player and my pre-amp cost as much as an ipod! Unfortunately, this was all 220V and weighed at least 50 pounds(**), so when I moved out of myCountry, I had to leave it behind. Hence over the past 8 years, I have made do with my computer, a pair of crappy active speakers (dumped 4 years ago) and some freebie earplug headphones.

(*) I’m not counting things that are wants but are only bought to replace things that wear out regularly such as skate wheels.

People who have never heard a HiFi system rarely know what they are missing. On standard systems, the kind that’s sold in Walmart, most music is kinda muddled. It is like hearing it through a pillow. The visual analogue is to look at a small forest through a fog. You only see the first few trees: the singer, the lead guitar, the drummer, and you get an idea of the bass player. In contrast, on a hifi system reveals several more layers. At modern reproductions you will be able to hear more instruments as well as the type of the instruments. You will hear the plucking of the guitar strings, the singer drawing in breath, the violinist turning over a note sheet. I’m getting carried away here

Hence, if you actually listen to music rather than just use it as a sound carpet, a good system can make you rediscover your entire CD collection.

Now, this is not all good news. Something that will become immediately apparent is that some recordings just plain suck. Rather than the layered sound stage you would expect, the sound can be inherently two-dimensional; like the recording of a radio playing if you get my point. This is particularly a problem of compressed music from the 1980s and early 70s. Recordings that have subsequently been remastered are not as bad. Other recordings will astound you by revealing that what you thought was one voice singing is actually two voices, that there are several instruments adding to what used to sound as ambient “mud”.

In other words, your collection will get separated into good CDs and bad CDs. You will also find that online music is somewhat compressed and that the quality is not that great.

Upgrading your system should generally start as close to your ears as possible. If you’re keeping your speakers under your desk (you infidel!) get them up to ear height to form a somewhat equilateral triangle with your head. The next step is upgrading the speakers. I went for headphones, because small is beautiful. Also in a small space, noise is not always appreciated by all parties. I selected the SR60s because they could be driven directly from the headphone jack and did not require a headphone amplifier. The next step would obviously be to get a headphone amp. Things have evolved considerably in the 8 years I have been out of the field. The audiophilistic danger of upgrade fever is ever present though. For just $50 more it is always possible to get something slightly better, so where does it stop.

I have found that low-end consumer goods have a threshold as do high-end consumer goods. Low-end consumer goods is what practically everybody buys (Ford, Toyota). High-end consumer goods are ones you have probably never heard about (Maybach). The mid-range is where you want to be (Lexus, BMW). The reason is of course explained by the law of diminishing returns (read here, and here). You always want to be in the middle, that is, the linear part of the S-curve where benefit is proportional to cost. A good rule of thumb is that this range generally starts just outside the range of goods offered by mass market retailers, so go see a specialist and ask for their “just after beginner”-level model.

Added: When the original cushions give out, a good replacement is Sennheiser HD414 cushions (cost about $10 on eBay). If you don’t mind the bright yellow colors, they are in my opinion superior to the original.

I wish I could get into headphones. A lot of people really enjoy them, and definitely they are in line with simple and frugal living. I have a phobia that I will lose my hearing if I use them (I won’t even use anything portable). The way I figure it, a lot of elderly people have horrible hearing and they never cranked up headphones or spent time headbanging in mosh pits etc. So how will our generation turn out? I also find them very uncomfortable and they hurt me after an hour or two .. But many people can listen to them all day long.

What is a good choice for wearing in a noisy environment, such as on an airplane or while running on a treadmill in a line of treadmills?

I bought some Sennheimers PXC 250 noiseguards that I wear to the gym. The wires are showing through in various parts of the cord, which is way too extensive and obtrusive (easy to get it caught in a machine). I have used electrician’s tape to cover the exposed wires, but it doesn’t seem to be a good solution.

jane sf said,

THE Frugal Bachelor? We were worried about you! I hope you post soon. I miss you – I mean it!

Hey Jacob, Vic Firth drumsticks makes the product your talking about, industrial earmuffs with speakers on the inside, you need an amp to run them though because they are very quite. Personally I use middle of the range sennheiser headphone, listening to music on anything less isn’t enjoyable after hearing hi qualifty audio

jane sf said,

I missed the fine print re “originally posted” – really, I rarely miss one of your posts – I credit you with being an inspiration and instructor in the art of early retirement. Sadly, no trace of Frugal Bachelor. I miss his honest perspective – but, Escapologist is a great find – Thanks for his post!

slowth said,

I’m an amateur audiophile, since I could never drop the cash on the high end gear. I own Boston Acoustics bookshelf speakers, which are in the linear part of the S-curve. I don’t like stuff, even stuff I like, so I bought a pair of Shure SRH440 headphones to minimize the clutter. Those headphones were stunningly good and completely uncomfortable. It felt like I had strapped my bookshelf speakers to my head. I reluctantly returned them and bought the Grado SR60. Almost as good as the Shure without the vice grip on my skull. I’m good to go.

Oh, Jacob, thank you for your site and book.

Chris said,

Glad to see some small luxuries here. Using crappy airplane headsets is a turn-off to this lifestyle for too many folks! I believe in some modest luxuries. We own less than 10k of personal stuff total, including both cars and a motorcycle, but it’s increasingly stuff that I like. When something crappy breaks, I replace it with something fairly nice.

I buy surplus blackberry headsets off ebay for like 2 bucks a pair as needed. They’re much better than airline headsets, but not as nice as my $100 studio pair that I got for free.

Sjaak said,

Thanks for the very interesting insight in the elite audio world. I think the BMW-Toyota gradation is tricky, certainly where longevity and reliability is concerned. Maybe in quality of finish and driving feel, but value for money in this case seems more dependent on buyer perspective.

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